Friday, 27 February 2015

WHO figures show 43 million people of my generation aged 12-35 have hearing loss and the prevalence is increasing.

In that age group, the WHO said, half of people in rich and middle-income countries were exposed to unsafe sound levels from personal audio devices and pinball wizards.

Meanwhile 40% were exposed to damaging levels of sound from clubs and bars that could be seen for miles and miles and miles.

The proportion of US teenagers with hearing loss went from 3.5% in 1994 to 5.3% in 2006.

Dr Keith Moon, the WHO's director for injury prevention, told the BBC: "What we're trying to do is raise awareness of an issue that is not talked about enough, but has the potential to do a lot of damage that can be easily prevented, and there is no substitute."

"That's a rough recommendation, it is not by the minute, to give those kids who are alright an idea to those spending 10 hours a day listening to an mp3-player.

"But you better you bet, even an hour can be too much if the volume is too loud."

An interactive graphic released last month by sales agent JLL on their website predicts the parts of the route that are likely to see the biggest house price growth once the Shenfield to Reading line starts to kick in in 2020.

The agent has charted all 38 stations and installed a number of filters that predict where the most money can be made. Top performing areas include Whitechapel in east London, with Woolwich in the south east coming in at a close second.

Wednesday, 25 February 2015

I must have done a couple of similar debunkations before, but this is another one which has been bugging me, where the answer is blidingly obvious if you stick to, er, actual hard facts.

The KLN goes thus: "Ah, but if somebody loses their job, how will they pay the LVT?"

Let's gloss over the fact that the two-thirds of the population have exactly this problem with rent or mortgage payments (i.e. privately collected LVT) and that somehow or other as a society we cope with this (via mortgage holidays, housing benefit or mortgage subsidies, social housing etc), it's not a big problem if you look at the numbers on short term unemployment.

... the short-term unemployment rate, i.e. the number unemployed for six months or less expressed as a percentage of the labour force, fell to a six-year low of 3.3% over December-February and is below its 3.5% average since 1995. This suggests that job losers and people entering the labour force are finding work relatively swiftly – consistent with the message of strong demand from the vacancy rate. The current 3.3% rate is close to the 3.2% level reached before the start of the last interest rate upswing in November 2003.

So one in thirty people are between jobs at any one time. A lot of that is probably 'voluntary' and many of those will have a partner who is still in work and who can pay the LVT. So call it 2% max.

As long as there are rules in place to distinguish between people whose employer has gone out of business/who have been made redundant through no fault of their own/are likely to find another job soon; and general shirkers/the long term unemployed, they could simply exempt such people from LVT. A crude way of doing this would be to give people a cumulative six-month exemption in any rolling five or ten year period, or whatever, which they can 'use' if they are made redundant. There is no perfect right or wrong formula.

So there would be a non-collection rate of 2%, which is no lower than for any other tax anyway, tuppence ha'penny in the grander scheme of things and a great reassurance to everybody in general.

And for the long term unemployed and sporadic earners, there's always social housing (which is like LVT and a Citizen's Income rolled into one).

Some meddler from Policy Exchange has dreamed up five random measures which he thinks would encourage saving, see City AM.

Like all politicians, he ignores the fact that the main point in saving when you are earning well is to be able to dis-save (i.e. spend more than you earn i.e. use up your savings) when you aren't. It's about maximising the marginal utitlity of consumption. On an individual level, over a lifetime, the optimum savings ratio is precisely zero (you can't take it with you!), so on an aggregate whole-population level it must also be zero. But hey.

The infuriating thing is that he actually identifies much of the cause of our collective lack of savings in his opening paragraph:

As a nation, we are bad at saving. While the reasons for this are many and varied, the belief that house prices are a one-way bet..."

Correct. There is an easily identifiable, long run negative correlation between house price inflation and saving; people respond very quickly, so in 2008-10, people started saving again. If you kept house prices low and stable, that would be an extra 5% saving per year. And we know how to achieve that.

... the design of our welfare system...

Well yes and no. Asset-based means testing is spiteful, pointless and badly designed. If it somehow budged people into dis-saving in the bad times it would be OK but by and large, it discourages a lot of people from saving in the first place.

To the extent that they absolutely have to do asset-based means testing (to minimise cost of welfare state), at the very least they should only assume a reasonable return on savings (rather than making it all-or-nothing) and include housing wealth as well as proper cash savings and investments. And there is no need for means-testing, we already have a tax system to take away part of people's income.

But means-testing seems to be politically popular (or else they would have got rid of it years ago).

... and the inability of humans to properly judge their future financial needs all contribute to UK households putting less aside than their counterparts in other G7 counties."

The vast majority of the UK population doesn't have any spare income so it's a flawed sample, and other countries aren't quite as Home-Owner-Ist. Either people are struggling to pay off sky high mortgages and rent; or they are merrily doing mortgage-equity withdrawal and pissing it away.

Once you understand all this, it must be pretty obvious that all his silly gimmicks (like handing out free Lloyds and RBS shares) or having compulsory 12%-of-salary pension contributions are pointless at best and counter-productive at worst.

The BBC reports that the FVLA is auctioning off this registration number and expects to receive hundreds of thousands of pounds for it.

But what are people actually paying for (vanity aside)?

What if - as a thought experiment and not a policy proposal! - the government decided to simply install a trackable chip in all cars instead and abolished the requirement to have a unique, registered number plate visible at the front and back. This is perfectly do-able in urban areas e.g. Singapore.

In that case, people would be free to drive round without visible number plates, or to stick on any old number plates they liked as decoration; be that their initials, car make and model, telephone number, favourite football team, whatever.

In which case, surely, vanity registration numbers would be worthless. So, what are people paying for? It's a simple question with a simple answer.

Tuesday, 24 February 2015

The UK tax system crudely divides people's income into 'investment income' and 'earned income'.

By and large, investment income is only liable to income tax, not National Insurance. NI is a regressive tax, so in % terms, this exemption benefits basic rate taxpayers more than higher rate taxpayers. The logic behind this is highly tenuous, it is based on The Big Lie that NI is a kind of pension or unemployment insurance, but there you go.

However, investment income (i.e. income from shares) differs from earned business income in that you cannot claim any expenses against it. So you cannot claim a deduction for interest paid on money you borrow to buy shares (except in very narrow and actually quite sensible circumstances). (Employees struggle to claim any expenses whatsoever of course, but they are always bottom of the heap and taxed most heavily).

Proper businesses i.e. the self-employed can claim most expenses as business expenses (and rightly so) but they are liable to some NI at least (although at half the rate of employees). Again, fair enough, you don't want to tax initiative too highly, better to tax the plodders.

As per usual, landlords get the best of both worlds. For NI purposes, it is investment income and hence exempt, but magically, for income tax purposes it is earned or business income and interest is an allowable expense.

So it ought to be one or t'other. As it happens, the extra tax that would be raised if landlords had to pay NI or couldn't claim interest against tax is in the order of £2 or £3 billion a year, the figure she gave, which is a probably a lucky guess on her part.

Whether you earmark this extra money for building social housing or anything else (like reducing taxes on employment) is irrelevant. It's about trying to make the tax system reasonably coherent.

The Green leader, who revealed her party now had 54,500 members, also defended the policy of taxing wealth - from property to luxury cars - amid claims it would raise only a fraction of the £45 billion claimed by the party.

Ms Bennett told Today: 'What we are talking about is, we don't want to just tax property, because that excludes about two-thirds of wealth, we also want to tax pension pots, holdings in cash, Ferraris, whatever else it might be.'

Daft cow.

£45 billion is pie in the sky. £4 billion would be an optimistic estimate (i.e. as much again as Inheritance Tax), realistically it would be naff all.

Pension pots are taxed as they are primarily shares i.e. dividend income, which is received out of net corporate income after VAT, Business Rates and corporation tax have been paid. Cash holdings are taxed, via negative real interest rates plus income tax just to bayonet the survivors. Ferraris are taxed (VAT, fuel duty etc).

I assume that when she says 'property' she means land and buildings. In income generating terms, it is not one-third of total 'wealth', it's more like two-thirds. More to the point, if you tax all wealth at the same rate, it would have to be a very low rate (0.5% a year or something) otherwise people just don't pay it (which is why wealth taxes in the narrow sense have been phased out in most countries).

But you can merrily tax land and buildings at 2% or 3% of current values and the tax base is scarcely eroded because they can't just disappear or be moved or hidden abroad. See also: Business Rates.

4. Call me cynic

Is it possible that Ms Bennett is a fifth columnist, parachuted in by TPTB to discredit the Georgist and environmentalist movements?

It doesn't really matter what they cost to build in £millions or £billions, the important consideration is whether the overall annualised cost (minus rental income) is less than paying Housing Benefit to private landlords.

Gov.uk says there are 1.7 million HB claimants renting from private landlords at a total cost of £9.32 billion a year = £105 a week average.

Councils can wangle land virtually for free, and the build cost for a small terraced house or a decent flat can't be more than the £60,000 figure she gave*. Let's say councils borrow at 3% over 25 years, that's loan repayments of £3,500 per unit per year plus £1,500 annual maintenance and running costs = £100 a week.

So even if councils allow people to occupy them rent free, it's still no more expensive than paying Housing Benefit.

If you factor in rental income of £80 a week (the average charged for social housing), it is a considerably better deal for councils, tenants and the taxpayer. And it's a considerably better deal for working private tenants who are not claiming HB because private sector rents will fall markedly and/or lots of landlords will sell up**.

That woman is her own worst enemy. And I happen to know that she has been presented with itemised and robust calculations for paying for their suggested Citizen's Income; I accept that you can't her to remember the finer details but surely you can expect her to remember that it's all been worked out and costed?

If you join the dots, they can also claw back a lot of the Citizen's Income in rent, in other words you can choose between £72 a week cash or a roof over your head, however modest.

FFS.
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* Steven L points out in the comments that if the government spends money on having housing built, it claws back a fair bit of that (a third?) in CIS deductions, PAYE, corporation tax (housing is zero-rated for VAT).

So if it funds construction by borrowing, it is cash positive in the first few years. The 3% interest cost is further reduced by income tax thereon.

I cheerfully admit that £60,000 might be a bit on the low side and I did not factor in a cost for land. But all of these little adjustments net off to nil at worst, leaving the overall saving to the taxpayer intact.
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** Bayard in the comments thinks that the latter effect will outweigh the former:

"If the Housing Benefit claimant market collapses, because either there are no claimants or the claimants are suddenly a lot "poorer", then the most likely outcome is that there will be a lot of houses on the market as the BTLers sell up."

Either way, it's all good, as most private tenants would rather be owner-occupiers.

So now we know.
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Last year, our landlord decided to chuck us out and sell the house.

Being too lazy to move and having given up hope of there being a house price crash, we put in a cheeky offer which was accepted. So the thought experiment which helps us demolish a lot of "Killer Arguments Against LVT" is quite real in my case.

I was chatting about this to somebody at work and he told me he'd once bought from his landlord, and a longstanding YPP accomplice did it a year or two ago. So out of a very small and totally unrepresentative sample, that's three people.

Dr Clifford Mann, president of the College of Emergency Medicine, said that those with 50 or more visits tended to have mental health or other significant social problems. They often attended A&E in search of warmth, “a cup of tea” and a friendly face, he said, and were less of a burden on staff.

A bigger problem was caused by those using A&E as an alternative to GPs and who required assessment before being confirmed as non-emergency cases. Dr Mann said that campaigns to deter such patients from attending A&E had been a “dismal failure” and new primary care centres should be set up alongside emergency departments.

Sunday, 22 February 2015

The fourth picture is the nicest house on our road, which serves as our template.

I'd love to do a loft conversion, and I'm sure that a mansard roof is far more practical and sensible (second picture), but the rest of my family reckon that having a gable roof with round windows upstairs (third picture), which is a style peculiar to the street we live on, looks much nicer.

And here are our templates. Nobody really likes the three narrow windows upstairs in the fourth picture. Somebody up the road copied it (fifth picture) and made the second floor windows further apart but still not lined up with (and too large relative to) the windows on the first floor. Gloss over the disaster-zone of the built in garage. Hence why I thought you can't go far wrong if the windows all just line up vertically:

A couple of years ago there was a marked increase in the number of doormen outside pubs etc. in central London, all of whom have a fancy little licence thingy displayed on their arm.

I got chatting to one yesterday (who does it part time while doing a BA in management) and between us we pieced together the sequence of events…

1. After the riots of 2011, a lot of insurance companies found a brilliant excuse for not paying out claims, which was that the shop involved did not have sufficient security guards, and this was written into later insurance policies. (As an aside, the guard reckoned that far too many shopkeepers were robbing their own shops and then claiming for missing goods, not sure what difference it would make).

2. So all the shops and pubs had to hire security guards, and the 'industry' boomed.

4. To be able to work as a security guard, you have to go and do the accreditation course, which takes a week or two and which costs you £300 to £400. Most employers don't reimburse this.

5. So then we get a load of private businesses providing these courses e.g. here, the guard I was talking to couldn't actually remember learning very much, but you need to do it to be able to get the job to keep the government and the insurance companies happy.

The fact that while paying a couple of security guards to hover at the doors of your shop or pub during opening hours might deter normal shoplifting or general rowdiness, it wouldn't make the blindest bit of difference if masses of people raid the premises after closing time when they are not on duty and would be completely overwhelmed anyway was not lost on either of us.

Friday, 20 February 2015

The NHS is free at point of use, so they have to impose two types of rationing:

1. Some services are simply not provided because they are deemed too expensive or not medically necessary.

NICE explain this concept ("it is not worth keeping you alive") as diplomatically as they can here.

2. Waiting times. If waiting lists are long enough, then some people simply don't bother going for NHS treatment; either they go private, live with it, die with it, or it goes away by itself.

As we well know, most GP's are taking the piss. Besides charging for non-existent patients, taking bungs from medical rep's and doing little other than referring you to a specialist, prescribing antibiotics/painkillers or telling you to go away, they are underworked, overpaid and you have to wait days for an appointment. If you miss your slot by a few minutes they give you another appointment in a few days' time.

Faced with this intransigence, many patients with something acute go to Accident & Emergency (even if strictly speaking it was neither accident nor emergency) and take their chances. Even if they have to wait more than four hours, at least it gets dealt with on the same day at a time of their choosing.

What riles me is when people contradict themselves several times in the space of one article:

Leading think tank the Centre for Policy Studies slammed the annual levy and said it would damage the UK’s investor-friendly reputation, deter workers in sectors such as financial services from moving to London, and chase away high net worth individuals from doing business in Britain...

There's no real life evidence for any of that; quite observably, high corporation tax rates discourage people from "doing business in Britain" and high income tax rates and Inheritance Tax rates chase truly wealthy people away, but all the evidence is that they are heartily indifferent about the cost of owning a home.

Or else they wouldn't be willing to pay £2.4 million for the terraced house in Fulham pictured in the article, or to pay the property tax in New York ($100,000s a year on the most expensive ones) or to pay the Swiss lump-sum tax (instead of income tax, you can opt to pay a fairly hefty property value tax, about 5% - 8% of what your Swiss main residence is worth).

There is plenty of evidence to support what I say: there are plenty of wealthy non-doms in the UK who are willing to pay £50,000 each in exchange for paying a very low rate of income tax, and as many again who are paying the the ATED charge on their home of up to £218,200 for a £20 million-plus home.

But never mind, everybody is entitled to their 'opinion'.

The paper also accused a mansion tax of being “crude” and not distinguishing between those who have the means to pay it and those who do not.

Ah, so they'd prefer higher income tax? Which genuinely does chase truly wealthy people away and by osmosis, attracts lower income people?

At the very top end of the scale, those individuals who buy multi-million pound homes through companies will just soak up the extra tax, said Mr Moran.

Faced with the choice of paying £7,000 Mansion Tax (their estimate) if they own the home personally or £23,350 if they own it via a company..?

So can he make up his mind; the truly wealthy will pay it out of petty cash or they'll pack up and move abroad? It's one or t'other, moron.

“It will be the lesser valued properties for whom [homeowners] suddenly every year will have to find an extra £3,000, and we’ll see a lot of elderly homeowners selling up, which will make people very angry.”

Nice diagonal comparison there!

Why would anybody get "angry" about this; the elderly who cash in and buy themselves something equally lovely but somewhere less fashionable and have a million quid spending money? Their heirs? The people who can now buy in London for a lower price? The estate agents who get some extra commissions and the painters and decorators who tart it up for the new owners? Who?

... this is one of the Chelsea fans caught up in claims of racist behaviour.
Former public schoolboy Josh Parsons, 20, was named on Twitter as one of the men standing in the carriage where a group shoved a black man off a Paris train.

Mr Parsons is yet to speak about the incident and there was no answer at his £1.5million six-bedroom family home in Surrey yesterday, which he apparently shares with his grandmother.

Thursday, 19 February 2015

India's tiger population has grown rapidly with 2,226 tigers recorded in 2014, up from 1,706 in 2011...

There were a spate of tiger attacks in India last year, with at least 20 people killed.

Tigers are beautiful animals and so on, but all these complacent Westerners who constantly bang on about protecting tigers in some faraway country are just latter day imperialists if you ask me.

If I were Indian, I'd have them all shot and then start campaigning for wild boars and wolves to be reintroduced in all countries in Europe, especially in the UK, which has been most successful in wiping them out.

So if you live in the UK and oppose the badger cull, that's fine, but don't start telling people in other countries what to do.

One genuine problem is that we LVTers argue and bicker between ourselves too much over relatively minor matters (while agreeing on the broader principles). So the Homeys can play divide and conquer. I pointed out that in the grander scheme of things and at current price and rent levels, the site premium of most homes is in the range of 3% - 3.5% of its selling price.

Physiocrat: Why is it even necessary to think about selling prices at all? There is so much rental evidence on the property websites.

One of the things you will notice is that there is a "floor" to these rentals - for example, you will not find a three-bed semi to rent anywhere for less than around £500 pcm. As a first approximation, it could be assumed that the land value in these instances, which covers a substantial area of the scabbier parts of the UK, is zero.

This assumption also does away with the argument for homestead allowances and other complications - the allowance is built into the valuation on the basis that the land value is too small to measure or be worth collecting.

In principle he is quite correct and I do not disagree (apart from the word 'scabbiest'), but let's look at the numbers:

The purist approach

A quick search on Zoopla tells us that you the rent for a three-bed semi in one of the cheapest areas (TS6) is indeed about £6,000 a year gross (£450 a month plus council tax).

Knock off £4,000 a year actual costs (amortisation of bricks and mortar, repairs, insurance etc) and the site premium here is about £2,000.

The rough and ready approach

Three-bed semis in TS6 sell for as little as £70,000 - £75,000.

£70,000 x 3.5% = £2,450 site premium.

I rest my case.
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Clearly, there must be a few little houses in the most run-down streets in the areas with the lowest wages and highest unemployment where the site premium is zero or close to zero, but that's only a few thousand houses out of millions and not worth worrying about. Such houses sell for £20,000 or something, and 3.5% of not much is next to nothing. £700 a year is the marginal cost of pavement repairs, refuse collection and street lighting if nothing else.

The other point is that when somebody buys an existing home, what he is paying for is future profits i.e. gross rental value minus running costs i.e. the 'site premium'.

Therefore homes trade for a multiple of their site premium and that multiple is surprisingly similar for all homes except the bottom one or two percentiles and the top one or two per centiles. But who cares? You can't base a sensible tax system on outliers; you start in the middle and work outwards.

Tuesday, 17 February 2015

Christianity should be consigned to history because it no longer has the answers to Britain’s problems, Thatcherites claim.In a highly sensible pre-Synod intervention which has angered clerics and prompted a response from Justin Welby, Thatcher's most senior disciples said the religious ideas embodied by The Church were “lobotomising” society and “entrenching” stupidity among everyone.They urged Conservatives to resist the nonsense of big religion as much as that of any over-mighty state and threw their support behind efforts to bolster aetheism in religion.The intervention came in the form of a 52-page letter from some people who aren't complete idiots.

One of the top five KLNs of all time is that is would be very difficult and expensive to establish the site premium of each plot, and most land value taxers skirt round the issue (there are plenty of countries which do it simply and cheaply, noteably Chile of all places, but that's by the by).

Having thought about this a bit more, establishing the site premium (rental value/LVT bill) for each residential plot is actually very simple if you start at the right end and apply the 'divide and conquer' concept.

1) The correct way of calculating the site premium/ tax base for each plot is to look at the total £ rental value of each home/plot and deduct the real £ annual costs of maintaining the building = £ tax base. I have done this over and over and establish that by and large and in the grander scheme of things, for most homes, the rental value is between 3% and 3.5% of its current potential selling price (as at 2014-15). It's a bit of a short cut, but it will do.

(Nobody says you have to collect 100% of site premiums in LVT, so you can choose any number between 0.0% and 3.5%)

2) You split up the country into lots of smaller areas with a few thousand homes in each (such as a postcode sector) and you work out the total site premium for that area by e.g. looking at average selling prices as recorded by HM Land Registry and multiplying by anything up to 3.5%. You can do the whole country in a few minutes with a spreadsheet and pivot tables.

3) If such a smaller area consists entirely of very similar houses - all semi-detached or all medium sized terraced houses, for example - then all you have to do is divide the site premium for that area by the number of homes, they all get sent the same tax bill, no discussion and end of back chat.

4) Clearly, such homogeneous areas are few and far between. In most areas there will be a mix of all types of homes, from small high rise flats to large detached homes with massive gardens. So the valuer just has to ascribe a relative value to each home, starting in the middle with 1.0 'units' for a three-bed semi, down to 0.4 'units' for a high rise flat and up to 2.0 'units' for a detached house with a massive garden. There's no harm in having a national set of guidelines for this which will get honed over time.

5) The valuer then adds up the resulting number of 'units', divides the total tax base by that number to work out the tax per unit and then multiplies up again. So if the tax per unit in an area is £7,000 and medium sized flat counts as 0.6 units, the bill on that flat is £4,200.
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We then get into the related topic of appeals...

6) The valuer publishes his initial list with ratings and tax bills for each plot/home and waits for the inevitable outcry with people moaning that their home is a only 0.8 units not 1.0 units because it's in the shadow of a motorway flyover or whatever. Some of these appeals will be justified and nodded through; others get turned down or put to some sort the popular vote: the gimmick is that the valuer doesn't particularly care.

7) Whatever happens, the total tax to be raised from that area is a fixed figure and gets divided by the number of units and multiplied up again, the total yield is the same.

To illustrate the point, let's imagine the total site premium is £24 million and the area consists of 3,000 very similar semi-detached homes, rated at 1.0 units each. The tax per unit is £24 million divided by 3,000 units = £8,000 per unit = £8,000 per semi-detached.

Everybody whines and moans and half of all houses are rerated down to 0.8 units, so now there are only 2,700 units in the area. Divide £24 million by 2,700 units = £8,889 per unit. The semis which still count as 1.0 units now pay the higher amount £8,889 and those which got downrated pay 0.8 x £8,889 = £7,111. Total tax collected is still £24 million.

8) So although every homeowner wants his own home(s) to be rerated downwards, nobody wants anybody else's to be rerated down, because the less they are paying, the more you are paying. So basically the valuer is a referee not a player and can let people bicker among themselves.

9) If people really can't agree, well then the local council just threatens to shut all its schools and hospitals, sack all its bin men and turn off the street lights. If that's what people want, let them have it. If people are selfish enough, they will end up with homes which are unsellable. If people are clever enough, they will use this as a bargaining chip to persuade the council to shut down a few white elephant projects and rein in excessive salaries etc. Who knows?

10) It is important to distinguish between reliefs which relate to a plot and those which relate to the individuals occupying it.

a) A majority of people in an area might see their vicar as the pillar of the community, and the vicarage as something for everybody's benefit. If they want to reduce the parish's cost of owning the vicarage they can agree to treat it as 0.1 or 0.0 units as a quasi-public building. So the bill for the vicarage is little or nothing and everybody else in the village has to pay a couple of quid more each year.

b) The same goes with listed buildings. This is a financial and practical burden on the owner of the building and, in principle, of vague general benefit to 'everbody else', so if people want certain buildings to be preserved, the building is valued at a lower number of units. If only a minority are prepared to chip in, then the listing is cancelled and the owner can redevelop.

c) Or maybe there are certain 'pillars of the community' who live in rather grand houses and/or have little in the way of income i.e. Poor Widows In Mansions. A sensible system would simply give them the option to defer the tax until the next sale, but if a majority of 'everybody else' in the area agrees that she/her heirs should have to pay little or nothing, the grand house itself is still pencilled in as 2.0 units, but in a separate column in the spreadsheet, the Poor Widow gets a personal credit of 1.9 or whatever. But when she dies or leaves the area, the personal credit is cancelled and the next owner of the house is liable for the full 2.0 units' worth of tax.

d) The Homeys like pointing out that if people's income falls, then at least their tax bill goes down, which is a fair argument (and just about the only argument) in favour of income tax. So let's see them put their money where their mouth is:

A local council could agree a scheme whereby, for example, if the main earner in a household loses his or her job, he or she gets a personal credit of up to 1.0 units and a corresponding LVT reduction for the next six months; the exemption to be only used once every ten years. On average, a couple of percent of people will be involuntarily between jobs at any one time, so on average, 'everybody else' will be paying a couple of per cent more LVT as quasi- unemployment insurance.

That's fine by me, and if the terms of the scheme are sensible I would probably be happy to pay a couple of hundred quid more a year to be on the safe side.

Admittedly, the story has only been picked up Russia Today and The Guardian, but even if you discount their inherent bias/hypocrisy, this is bloody typical and might explain a lot of the 'budget overruns' at the MoD:

Dozens of employees of arms firms are currently seconded to positions at the heart of the Ministry of Defence (MoD) and other parts of government, under an arrangement that has sparked concerns about the cosy relationships between the public and private sector.

More than 10 executives from BAE alone have been seconded into the MoD and the arms sales unit at UK Trade & Investment (UKTI) in the last year, according to records obtained by the Guardian.

Others include employees of MBDA (makers of missiles including those used by drones) and Babcock (the defence contractor involved in refitting Trident) as well as gunnery systems maker MSI, who have been occupying upper level roles inside the MoD.

The salaries of secondees were paid by their companies, not the government departments they joined.

Monday, 16 February 2015

I came across an interesting video on space saving furniture. At 2.45 the salesman points out that his furniture can allow you to live in a smaller apartment, presumably making a more desirable area affordable on a given budget.

Does Ricardo's Law not apply to space as well as rent? If, by using space-saving furniture, three people can afford to live an apartment that would otherwise only be big enough for two, is that not likely to push up the cost of those apartments, thereby rather defeating the object of the space-saving furniture?

Getting a receipt for all cash paid to politicians and political parties is a 'matter of good housekeeping' and was a 'good thing to do', Labour's Chuka Umunna advised business leaders this morning.

The shadow business secretary's remarks came after Ed Balls sparked controversy yesterday after calling for business and other lobby groups to document how much they pay every time they want to get the law tweaked in their favour.

Mr Balls said that too many businessmen made generous donations to political parties but were later disappointed when the promised tax break or subsidy failed to make it onto the statute books. Keeping receipts would enable them to demand a refund.

Mr Umunna added that two many MPs were given paid under vaguely worded contracts for 'consultancy' or 'advisory services' because their employers were often hesitant about putting into writing what they were actually paying for.

"It's a fine line," admitted the rising Labour star, "Agreeing to protect the existing bookmakers' cartel is a no-no, of course, so in that case, the contract would see an MP agreeing to 'help to protect the vulnerable by limiting the amount of betting shops on the high street'. Rope in a fakecharity to front the operation and bingo!

Council tax has overtaken credit cards as the most common debt problem in Britain, highlighting the strain on family budgets from years of stagnant incomes.

Citizens Advice, which has more than 3,000 centres around the country, said there had been a notable shift in problems away from consumer credit on discretionary items and towards basic household bills.

It expects to deal with 191,400 cases of council tax debt in 2014-15, up 20 per cent on the previous year.

The Homeys extrapolate from this to LVT and make outrageous claims about Council Tax being "the single biggest bill facing families" and LVT being regressive or unaffordable.

Nope.

The problem is in the way it is collected.

Leaving any other tax or welfare reform aside, council tax is barely one-seventh as much as PAYE deducted from wages at source. That's why very few individuals rack up "PAYE arrears". The point is that PAYE is withheld at source - you don't get the opportunity to get into arrears.

But if you are strapped for cash, it is tempting to delay paying £100 a month in Council Tax and given the trivial amounts involved, councils don't always chase up if people are a few months overdue.

Thought experiment: what if the tables were turned:

a) Council Tax were deducted at source from wages (or pensions or indeed other welfare payments) that would be no more than £250 a month in Band H (or Band I in Wales) and very few people would even notice the difference, and

b) People received their wages gross and were asked to self-assess their PAYE and pay it over in monthly instalments, then PAYE arrears would go through the roof.

That way lies madness.

(But what if Council Tax were collected at source (by adjusting people's PAYE codes, for example, all perfectly do-able)? That would make it much easier to transition to higher but more progressive land value taxation with a corresponding reduction in income tax and National Insurance.)

Sunday, 15 February 2015

Saturday, 14 February 2015

Tesco is capable of provoking strong emotions. There were riots when the chain opened an Express branch in the bohemian Stokes Croft district of Bristol. Although the store survives, a mural urging shoppers to "Think Local" and reject the chain is still proudly displayed in the area.

Conversely, when it was announced that the Tesco superstore in Kirkcaldy, Fife, would close, it was standing room only at a public meeting called to try and save it. The event was addressed by no less a figure than the local MP, former Prime Minister Gordon Brown.

Kirkcaldy's Tesco, situated in the middle of the town, houses a post office and is the focal point for the main taxi rank. It's on a bus route, which makes it the easiest store to access for many pensioners. Local traders told the meeting they feared a decline in town centre footfall if it shut.

Finally, at last, we have some concrete evidence of what I and many others always knew and have been banging on about for years.

The FSA and its successor the FCA are constitutionally corrupt. Both outfits have in practice absolutely no democratic, legal or financial accountability whatsoever. They are Government, the police, the judiciary, the jury and the executioner all rolled into one outfit. They contravene a key principle of a democratic government system - the separation of powers.

And now we have proof that the whole construct was ill thought through - or was it?

Even though the appalling New Labour are no longer in power, their legacy and programme continues under the Financial Catastrophe Authority. If you wanted to nationalise money, banking and financial services generally, but not seen to be doing so, why not establish a 'regulator' with wide powers that is forever unaccountable to the people and its parliamentary representatives?

I doubt that the rent seeking and witless Tories will properly exploit these revelations, probably because they put in place the FCA - which I can tell you from personal experience is far far more arrogant and ignorant than its predecessor.

Update.

IanB makes a good point in the comments which is actually part of my contention. The FCA (and its associates - The FOS and the FSCS) are crony organisations. You only have to look at the revolving door between the FCA/The Banks/The Big Consultancies/Government to see that in action. The FCA is no more a Consumer Champion than I am Miss World.

Friday, 13 February 2015

A Lib Dem commentator explains that adding more council tax bands at the top is much neater than having a completely separate 'Mansion Tax'.

Fair enough, but he then maintains that the proceeds should be paid to the central government to fund the NHS (which is meaningless gibberish).

A commenter fixes that problem deftly:

Money is fungible and therefore, since any money raised from an increase in council tax then syphoned off to central government would go as much to fund Trident and HS2 as the NHS.

It would be better, if you are going to have further bands, to allow the local authority to keep the money but simply reduce their government funding proportionately to avoid an unnecessary new level of bureaucracy that would be needed to syphon off the additional council tax.

But then resorts to Home-Owner-Ist lies to justify a variant on the old KLN:

As a thought experiment, how is it just and fair that I, who made the decision some years ago to stay in London and invest money in a home, should be taxed for that whereas some better paid peers(1) who decided to move to the commuter belt and invested their money in stocks(2) and pensions(3) and fast cars(4) instead will not be taxed at all?

"Not taxed at all"?

WTF?

1) If they were 'better paid' then they paid more income tax and NIC.

2) If you own shares, then you are very much taxed! The company pays a load of taxes on your behalf whether you receive a dividend or not. If you are a higher rate taxpayer, you pay a further one-quarter of the dividend as income tax.

3) There's tax relief for pension contributions which is partly cancelled out by income tax on pensions. But the majority of pension fund investments are shares which carry a high tax bill, see above.

4) There's VAT on new cars, VAT and fuel duty on petrol, and car manufacturers have to pay a load of tax like any other business (see 1). On average, each vehicle in the UK generates about £1,500 - £2,000 a year in tax (on top of the taxes which the manufacturer/importer has to pay), and twice as much in total as Council Tax.

Housing in London has increased in value far, far more than stocks and shares over the past twenty or so years.

So this complainant probably 'invested' very little in his home (tens of thousands of pounds, probably) and got the rest for free. If this man would rather live in the commuter belt and have money left over for shares, pensions and a fast car, then he can sell up and move, can't he? All in all, he'll still end up better off than his 'better paid peers'.

Mr Miliband has confirmed his mother Marion set up a deed of variation after the death of his father Ralph... the deed allowed ownership of the house to be split between Mrs Miliband and her sons [rather than going to Mrs M outright]. The paper quoted experts suggesting such arrangements could be used to reduce tax liabilities.

Mr Miliband later sold his share to brother David who also bought the rest of the property from his mother. But a Labour spokesman said: "Ed paid 40% capital gains tax when the house was sold in 2004/05. It can't be tax avoidance if no tax was avoided."

This is taxation for idiots. The rate is one thing, the tax base is another.

Inheritance Tax and Capital Gains Tax (at the time) were both 40%.

The difference is that Inheritance Tax is payable on the full value you inherit and CGT is only payable on the increase in value between when you inherit it and when you sell it.

So, by a circuitous route*, the sons ended up saving IHT of 40% x whatever the IHT nil rate band was at the time (£200,000, probably) when Mrs M died.

For Dave, who moved into the house, that was an absolute saving (future capital gains are exempt).

For Ed, the increase in value between when he inherited and when he sold to Dave was taxable at 40%. So he paid 40% on some of his ultimate proceeds but not on all of it, which he would have done without the deed of variation (40% IHT on value at date of death and 40% on future increase in value).
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* The circuitous route...

The original deed did not reduce the IHT bill on Ralph's death but was (almost certainly) done in order to use up his nil rate band. Most transfers to widow or widower are exempt anyway, but his sons inherited a share of the house worth as much as the nil rate band was at the time, with no IHT. This is then their base cost to deduct from a future sale to calculate the capital gain (if any).

So when Mrs M shuffled off, the value of her estate was correspondingly lower and so the amount of IHT which the sons had to pay when they inherited from her was less than it would have been without the deed of variation.

While this is bog standard IHT planning, the whole thing is now redundant because if the deceased did not use up his/her IHT nil rate band with transfers to other relatives, the unused bit goes to the surviving spouse, so it can be used when he/she dies.

A motorist had some explaining to do today after crashing into someone else’s £1million railings.

The driver lost control of the vehicle while driving around in an industrial estate in north west London. He crashed the motor into the one-off metal fencing, seriously damaging the gates and surrounding posts.

The car was spotted being driven earlier in the day with trade plates, and it is not thought the owner of the car was driving at the time of the crash. A spokesperson for the Met Police said no one was hurt in the incident, which took place in Park Royal at lunchtime yesterday.

The railings were installed at a cost of £1million 2003 and were thought to be worth in the region of £900,000 prior to the crash.

Between the iron gates of fate The seeds of time were sown And watered by the deeds of those Who know and who are known. Knowledge is a deadly friend If no one sets the rules. The fate of all mankind I see Is in the hands of fools.

Wednesday, 11 February 2015

Speaking on BBC Radio Scotland ahead of her speech to the Constitution Unit research centre at University College London, Ms Sturgeon said the SNP would support a "modest" increase in public spending of about 0.5% in real terms.She said: "Debt and deficit would still be falling as a percentage of GDP over these years but we would free up something in the region of £180bn over the UK to invest in infrastructure, in innovation, in growing the economy."

I don't think this country really needs any more infrastructure. Our problems with health aren't with a lack of hospitals, or even beds to patients to sleep in, it's the money for, and management of drugs, nurses and doctors, and that's mostly just spending. You could maybe count investment in health if people can't work because of illness, but in general, it's the old people who consume the health bill, not working people, and that's not going to pay off (which doesn't mean it isn't spending we shouldn't do, but it's not money-making investment).

We've got clean water, pretty good roads (and the potholes could be fixed for down-the-back-of-the-governments-sofa-money), billions being spent each year improving rail. School buildings seem to be pretty good. Electricity and drainage seems to work. We could do with more reservoirs, but the problem there isn't money, it's NIMBYs blocking development. Broadband speeds are getting faster to the point where most people are satisfied. There's a falling demand for libraries, plenty of lottery-funded sports centres around the place.

I'm not saying there aren't places we could spend more money, and some of that would even count as an investment, but I'm struggling to think of any infrastructure that we need to spend more money on. Anyone?
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MW adds, PC156 has gone off piste a bit: "Whilst you say that in general health spending is consumed by old people this doesn't appear to be born out by the data."

From the FT: "NHS England’s calculations break down how much the NHS spends on patients across 18 age categories. These show that those aged 60 to 64 cost the NHS twice as much as those aged 40 to 44, while those aged 85 and above cost about 10 times as much."

At least one-third of NHS spending is on people over retirement age, that much seems uncontroversial. I vaguely remember reading that it was half, but maybe that includes non-NHS 'social care' costs and subsidies for long term care?

"The UK's private landlords receive more in Housing Benefit than they pay in tax. It is the community, not the landlord that gives location its value. Average 2/3 of rent is location value.

So, not only do landlords NOT pay any net tax, they receive a £35bn per year de facto State subsidy on top."

To which I was treated to the following two replies. Firstly from Jill Harris-Kuhn:

"Total rubbish! Rent values have very little to do with location, and more to do with the size of accomodation - at least where I live in the Midlands. And yes, we pay tax according to what tax bracket our earnings fall under. Don't make stuff up!"

And then this corker from Paul Barrett:

"Another idiot who seems to think that tenants who pay for their accommodation needs via Govt provided welfare in the form of LHA is a subsidy to that LLl!!

Absolutely barking!!!!

So taking such an idiotic contention does the poster believe that a HB claimant who also receives JSA etc and then uses some of the money to buy food is giving the local supermarket a Govt subsidy!!!??"

Idiot posters like this really don't have a clue about how an economy works and how welfare supports those who need it to exist.

When such welfare is used to purchase relevant services such payments are NOT subsidies to the relevant merchant retailer!!

Without welfare being used to purchase services etc that the Welfare claimant requires would in mass starvation and homelessness.

I bet this idiot is a stupid Labour supporter!!"

The replies speak for themselves, but what's going on with all the "!!!!" and "??" ?

Harriet Harman's giant pink phallus hit the skids today after she was told by an angry voter it was offensive to just about everybody apart from hen parties.

The bright pink women-only giant mobile dildo was unsheathed in Stevenage today, but appeared to have problems navigating a supermarket car park and at one point was pictured parked across a zebra crossing. In an Asda supermarket she was confronted by an angry Labour voter who told her it was 'patronising and wrong' to divide men and women.

In a bizarre twist in gender politics, Ms Harman revealed the party had been holding 'doctrinal discussions' about whether a man is allowed to drive the Woman to Woman oversized sex toy as it tours marginal seats. Today it had a woman driver and was involved in several minor scrapes and a slightly more serious rear end shunt before finally leaving the supermarket car park.

Ed Miliband's spokesman denied rumours that he plans to tour the country in a giant snatch.
"He said 'Volvo', for crying out loud. V-O-L-V-O."

Sky and BT win Premier League rights: The billions keep pouring in, but do fans benefit from football’s boom?

Well no, fans are the ones paying for it all...

The clearest way that fans benefit from big Premier League TV money is through the quality of players that their teams are able to attract. Last summer’s spending by top flight English clubs eclipsed their supposed peers in rival leagues.

Premier League clubs spent £835m – more than all the Serie A clubs, Bundesliga clubs and Ligue 1 clubs combined. Hull City spent more than several Italian giants added together. Spanish top flight teams spent around half the amount of Premier League clubs.

Yes, but it's not 'quality' in an absolute sense, it is 'quality' in a relative sense. The overall skill level of players reached its zenith decades ago and football clubs are just in a bidding war to sign up the best players they can afford out of the top few hundred best players in the world. If the current top few hundred players were wiped out in some mega-Munich incident, then the wages of the surviving next best few hundred would quickly increase accordingly.

(Greater minds than mine showed that there is a fairly direct correlation between success on the field and paying high player wages, but this could be cause and effect.)

Or: all super-profits/rents accrue to the least elastic factor. And taxes are largely borne by the least elastic factor. In other words, if one country imposed a super-tax on player wages over (say) £100,000 a year, the best players from that country would go abroad (quantity reduced). But if all countries in the world imposed the same super-tax it would all cancel out. The total quantity and quality of players would be unchanged.

This should, in theory, mean better players and better teams. But football’s never quite that straightforward.

Tuesday, 10 February 2015

To those who say that Labour is anti-markets, Balls replies: “We have shown a huge understanding of how the markets work. Markets are really powerful in driving incentives but you need to write the rules of the game. Without them you get a lack of investment, collusion and a lack of competition.”

His first sentence is an outright lie, the middle sentence is correct and that last sentence sounds borderline Georgist, if only he realised landowners' role in the economy.

“Markets alone won’t deliver long-term infrastructure, or stability for the energy industry or vocational learning. Markets can not fund a basic science base. But a proper plan must understand the dynamism of a market economy and ensure that government plays its proper role in assisting that.”

Good list! That's what good government is all about, no more, no less.

(Yes, we know that he was quite senior in the last Labour government which got it wrong on both sides: two much intervention where it was not needed; not enough intervention where it was needed; and f- all 'investment' in roads, electricty generation or proper education. And we also know that, John Major aside, each UK government has been worse than its predecessor, so whether Labour or the Tories get in this year, they will be worse than the current Tory-Lib Dem coalition, but hey…)
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From the BBC:

It is not just the poor who voted for Syriza but the middle classes as well. [Home] owners in Athens's leafy, northern suburbs were enticed with the promised abolition of a hated annual levy on [homes].

Known as "Enfia", the tax was introduced in 2011 as an emergency measure but made permanent under the previous government. Instead, there will be a tax on luxury homes and large second [homes].

Fair play, their Enfia was a lot less than our Council Tax but it was more like a Poll Tax. If they make it more proportional to land values, then that must be a good thing. We'll see.

RAC head of external affairs Pete Williams said: "These figures make a mockery of motoring law. If there are not enough police on the road, we can introduce all the new rules we want, but those breaking them just will not get caught.

"While cameras are good at catching speeders and drivers who go through red lights, offences that relate to general poor behaviour at the wheel still rely on a police officer to enforce them."

Last week, the Institute of Advanced Motorists criticised "many years of government cutbacks and the resulting drop in visible policing" after the number of people killed on UK roads rose to 1,711 in the year ending September 2014.

But the DfT explain the reason for the rise, that Q1 2013 was a very cold quarter, which you might think would raise accidents, but it actually means a lot less cars on the road.

Even without that, 1% is just a tiny percentage that tells you nothing as a single data point. It might be that we've got road deaths about as good as we can get them*, that they've hit a plateau and it's now mostly about fluctuations around the number. Most of the decline has been down to things like drink driving laws, safer cars and better medical treatment, not police presence which have always been nearly non-existent on the roads.
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* MW adds, in terms of having a low number of road deaths compared to total population, the UK is more or less undisputed world champion. That's something to be proud of.

But Ms Reeves dismissed those concerns, telling BBC Radio 4 Today that “good” businesses that “value” employees will support Labour’s plans.

“This is exactly what people used to say about maternity leave, that it was a big burden on businesses. But the reality is, what good businesses know, is that it is really important to keep women in the workplace once they have children and not let them drift off because they can’t manage work and family life. That’s increasingly the case for dads.”

“Good employers like Asda, National Grid and Citibank are already giving more than the statutory paternity leave. What good businesses know is that unless they give that flexibility to mums and dads, they are likely to lose their best employees as they will go to a business that does value them, or they will sadly drop out of the workforce altogether.”

So, why does it need more government legislation? If it's in the interest of businesses, they'll do it. Now, maybe Rachel Reeves knows better than those businesses, but as someone who's only worked at HBOS, one of the failed banks, I think that's unlikely.

And ASDA aren't like a software or manufacturing company that can be based anywhere in the world. Adding 2 weeks paternity leave makes people here more expensive. OK, maybe only slightly more expensive, but "only slightly" can tip the balance in favour of another supplier.

As for maternity leave, I know a company that closed down a software team in the UK for this reason. Hiring staff that come in and within a year go off on maternity leave for a year introduces huge costs, most notably, backfilling with expensive temporary staff. It increased their staff costs by 10% over a 2 year period, which was enough to shut down the team and expand the team in the USA.

Monday, 9 February 2015

While researching that post about Heathrow at the weekend, I thought it best to re-read what the treaty actually says on the subject of landing fees. Quite sensibly, it says that each country can decide its own landing fees, but may not charge foreign airlines more than domestic airlines (Art 15)...

... when I noticed this:

Article 8 - Pilotless aircraft

No aircraft capable of being flown without a pilot shall be flown without a pilot over the territory of a contracting State without special authorization by that State and in accordance with the terms of such authorization.

Each contracting State undertakes to insure that the flight of such aircraft without a pilot in regions open to civil aircraft shall be so controlled as to obviate danger to civil aircraft.

The turnout was 118 people, so I suppose we are going to have to say that any party leader who got the nod from more than half the electorate (59 votes) go through to the televised round. So Clegg, N. and downwards didn't make it.

Some good suggestions for other: Al Murray, Rory Bremner, Kate Upton and "a YPP person". But the most popular other suggestion was "none of the above".
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No Fun Online Poll this week for the simple reason that nothings springs to mind.

Sunday, 8 February 2015

... don't talk about Land Value Tax unless you know about land values.

The LVT campaign linked to an article in The Guardian about Business Rates. By far and away, the single largest BR bill is on Heathrow airport, if you add together the airport, the maintenance area and Terminal 5 (ignore cargo terminal), it's £150 million a year. The next biggest is Sellafield, at £32 million.

(The LVTC article appeared to suggest that Heathrow was overtaxed. Sellafield might or might not be; in terms of 'alternative use of the land they are occupying', they are wildly overtaxed, but what they are paying for is 'the right to run a nuclear power station' which as we know is worth ££billions. Even if the right is only worth £1 billion, then £32 million a year BR looks about right

UPDATE: LVTC blog has now amended the article to clarify their stance, excellent.)

Returning to Heathrow, their BR bill is tuppence ha'penny, frankly.

What Heathrow airport is paying for is not so much the site itself (all 3,000 acres of it!) but the privilege of using London's airspace and quick transport links into London.

Acording to Heathrow's website, there are about 480,000 aircraft movements a year (one landing plus one take-off).

Check: one every forty seconds, 14.5 hours a day, 363 days a year = 473,000. Looks about right. There are different figures for the number of passengers, so let's take the mid-point 65 million.

[Update: Curtis adds, rather curtly: Where do you get "14.5 hours a day, 363 days a year"? Heathrow is open 365 days a year and planes are in action from 0430-2330 every day.

Answer: I was doing a rough check to see whether 480,000 aircraft movements looked plausible, and it does. Maybe it's 1 plane every 47 seconds x 17 hours a day x 365 days a year. This is what is referred to as 'missing the wood for trees'.]

Divide our BR bill of £150 million by 480,000 movements = £ 313 per aeroplane landing and taking off, or about £2 per passenger. Seems pretty good value to me.
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There's far more to it than just BR of course.

The biggie is actually Air Passenger Duty. Let's assume that Heathrow airport generates half of all APD in the UK (it might be two-thirds, who knows?), that's £1,600 million a year. Ten times as much as their BR bill.

Heathrow is running at capacity, so whatever taxes they pay, they are clearly not so high as to depress demand/output.

APD is a tax on transactions (the worst kind of tax); a flat per 'plane tax would be far better; but best of all is to scrap APD and hike Heathrow's BR bill to £1,750 million all-in. That's £3,300 per aircraft movement or £25 per passenger (return trip).

Relieved of the faffy and inefficient APD, airlines will be able to increase ticket prices accordingy, and the regulator would then allow Heathrow to increase its landing charges from £20 to £45 per passenger.

(Clearly, it makes more sense for Heathrow to charge per aircraft movement than per passenger. All things being equal they want fewer aircraft movements (expensive and risky) and more passengers (very lucrative, they spend money at the airport), but there you go.)

… don't talk about Working Tax Credits unless you know about Working Tax Credits.

Ben Jamin' politely pointed out here that with a flat tax on incomes of 20%; a flat tax on housing you own of 3.5%; and a flat Citizen's Income at current Income Support rates, a low earner on £13,500 a year paying £90 a week in rent would be about £4,460 a year better off compared to the current tax/welfare system. You can check his workings here.

Numpty Ingliz replied: "No, that is wrong, as there is £52.68 per week in working tax credits you would lose."

Well, firstly, the YPP tax reform proposals which Ben is basing all this on takes Working Tax Credits into account. We're not completely stupid.
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Secondly, no single earner receives anywhere near £52.68 a week Working Tax Credits, it is mathematically impossible.

In other words, you get no Working Tax Credits whatsoever. Nothing, nix, nada.
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On £13,500, you are also paying £1,365 in PAYE (income tax and Employees' NIC); and suffering/paying Employer's NIC (£765) and VAT of approx. 10% of your earnings (£1,350), comes out at £3,480. Let's assume that Council Tax is economically borne by the landlord, or that makes our system even more favourable.

All of which means that our low earner tenant in this example is £4,400 to £4,500 a year better off (depends slightly on how much Employer's NIC is borne by employees). Which covers his £90 a week rent, so there's no need for Housing Benefit, which in this case would only be a few quid, let's not bicker over small change.

Suffice to say, our low earner is not only a lot better off anyway but a) he doesn't have to fill in endless stupid forms or worry about benefits being clawed back etc and b) his marginal tax/withdrawal rate is 20% and not around 50%.

Friday, 6 February 2015

Police advised the leader of the anti-Europe party to remain in the office after threats from the office manager.
He was forced to stay late and help volunteers stuff and label a thousand envelopes for a mail shot before being led to safety by officers.

Mr Farage had been due to saunter in, cut the ribbon on the office of Ukip's general election candidate Jane Collins and then swan off to his next photo opportunity.
But the office manager said that Mr Farage was not welcome in the town unless he was prepared to muck in with the administrative work.

A party spokesman branded the manager "hard-line Stalinist". Mr Farage added that he was the victims of office bullying.
Insiders confirm that they later overheard Farage speaking on the phone, saying "No, darling, this time I really am trapped in the office. Literally. They've locked the bloody doors."

A Labour victory, or a red-led coalition, could be detrimental to the housing market, reducing the supply of homes and deterring overseas buyers from investing in London, property experts have warned.

Two thirds of UK landlords will leave the private rented sector if Labour wins the general election in May and a rent controls policy is introduced, limiting the number of affordable rental properties, according to new research from the Residential Landlords' Association (RLA).

There's no need to speculate about what might happen. The UK had rent controls in one form or other for most of the 20th century, and the result was indeed that private landlords nearly all packed it in and sold them for affordable prices to... the very same people who would otherwise have been forced to rent.

Which, was at the time widely heralded as a Very Good Thing.

Another classic bit:

According to research by Rokstone there are approximately 97,000 properties worth more than £2m in the capital. "Therefore if a mansion tax is introduced it will totally disable the London property market," Ms Fatemi added.

"Totally"? According to Savills, there are 3.4 million homes in London.

So the Mansion Tax might affect 3% of London homes. Hardly "totally".

"This could be the straw that breaks the camel's back...we need to be very careful we don't push people too far and seen to be anti-opportunity or, ultimately, investment will go elsewhere and into other asset classes."

If people invest in other asset classes, that's A Bad Thing because..?

The ONS standard method defines the winter period as December to March, and compares the number of deaths that occurred in this winter period with the average number of deaths occurring in the preceding August to November and the following April to July:

EWM = winter deaths - average non-winter deaths

Fair enough, that tells us how many more deaths there are during winter, largely down to the cold etc.

But are they really 'excess'?

It's the same question as with holidays. Are holidays the normal price during school holidays, and at a discounted price out of season; or is the out of season price the normal price, with a premium being charged during the school holidays?

You could just as well argue that the death rate during winter is normal and publish statistics on "insufficient spring, summer and autumn deaths".

To my mind it makes more sense to:

a) Compare the number of winter deaths with the number of deaths for all months of the year, not just non-winter months. If spring, summer and autumn are particularly mild (not too hot, not too cold) then more people who would otherwise have died will make through to the next winter, at which stage they pop off. This adjustment would reduce the official number of winter deaths by one-third.

b) Compare the number of 'excess' winter deaths for any year with the long run average of 'excess' winter deaths. The long run average is officially 28,000 which we can reduce by one-third to 21,000. This year's EWD's of forecast 40,000 are 26,000 when reduced by one-third, which is 'only' 5,000 more than the adjusted long run average.

Just sayin' is all. And don't forget to wrap up warm and avoid icy patches.

A SCHEME that allows people renting property to take out an interest-free loan from their employer for their deposit is to be rolled out across the UK after launching in London last year.

The scheme, which will work like the season ticket loan, already in place to help commuters pay for their travel costs, was launched by London Mayor Boris Johnson with charity Shelter yesterday. The Co-operative Group will be the first employer to offer it to its 70,000-plus employees.

a) Those deposits will be leveraged up with commensurately larger mortgages.

b) The worker who takes that first sweet taste of Home-Owner-Ism will henceforth be beholden to his boss.

"Sir, how about a pay rise to help me pay off my mortgage?"

"Hmm, interesting... how about I don't call in that £10,000 interest-free loan?"

LONDON renters are hoping for enough snowfall to fashion their own crude igloo-style dwellings.

31-year-old teacher Emma Bradford said: “I’ve been renting an expensive shithole after being priced out of the property market. Snow is my only chance of owning a home, even if it melts before I get a chance to put any pictures up. This morning I scraped together enough to build the bottom inch of a crude dome structure on the pavement, but then someone destroyed it with a baby buggy.”

However, the current flurry of snow which has fallen on London is already the property of millionaire foreign investors. Russian oligarchs and Asian venture capitalists bought the snow as it was still crystallising from atmospheric moisture.

Their representative, buy-to-let agent Tom Logan, said: “We are excited to unveil Arctic Heights, an exclusive development of 382 contemporary snow dwellings in the middle of East London.

“Our igloos offer boutique, easily commutable eskimo living in Zone 5. Starting at £1k per week, deluxe ‘Snowdude’ models even have a window made from an old car windscreen.”

The snow owners also plan to levy a £5 per day charge on Londoners who are walking on their flakes.

Tuesday, 3 February 2015

"Occasional lip service has been paid to the power of capitalism to create wealth and jobs. But it has been drowned out by attacks on landlords, energy suppliers, railway companies, financiers, bankers and anyone else who appears to be, in Mr Miliband's eyes, a 'predator' rather than a 'producer'."

If you look at that list, those people are predators and not producers!

For example, railway companies are providing services and however much some people hate them, they are providing very important services.

But the simple fact that they can increase their fares year-on-year without any [significant] improvement in their services clearly indicates that they are actually collecting unearned rent rather than just a fair return on capital/labour.

The same applies in spades to landlords, financiers and bankers, and, for that matter airlines and broadcasters. It applies to a lesser extent to energy companies, they are not ripping off 'the consumer' so much as they are ripping off 'the taxpayer' (via all these grants, subsidies, guaranteed prices etc).

(If Red Ed went round slagging off car manufacturers or dry-cleaners, that would be truly anti-business.)